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Labor Department issues final rule on ESG investing – Stock market improves at midday – Lawmakers urge Fidelity to drop Bitcoin retirement plan – Crypto pioneer wants tough U.S. laws to prevent another FTX
The US Department of Labor announced on Tuesday its final rule allowing “plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting,” according to an official news release by the Labor Department.
“After extensive consultations and feedback from a wide range of stakeholders, the department concluded that two rules issued in 2020 during the prior administration unnecessarily restrained plan fiduciaries’ ability to weigh environmental, social and governance factors when choosing investments, even when those factors would benefit plan participants financially,” the announcement read.
The rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” comes on the heels of Executive Order 14030, signed by President Biden on May 20, 2021. The order directs the federal government to identify and assess policies to protect the life savings and pensions of America’s workers and families from the threats of climate-related financial risk.
“Today’s rule clarifies that retirement plan fiduciaries can take into account the potential financial benefits of investing in companies committed to positive environmental, social and governance actions as they help plan participants make the most of their retirement benefits,” said Labor Secretary Marty Walsh. “Removing the prior administration’s restrictions on plan fiduciaries will help America’s workers and their families as they save for a secure retirement.”
On Tuesday afternoon, stocks climbed higher, with the technology sector shaking often early weakness. The NASDAQ composite rose 0.4%, and the Dow Jones industrial average added 0.8%, while the S&P 500 overcame yesterday’s loss, climbing 0.7%, Investor’s Business Daily reported.
Key stocks were Burlington stores surging 15.5%, American Eagle Outfitters jumped 14%, Best Buy rallying 11%, and Dick’s Sporting Goods rose 7.5%.
Despite topping quarterly earnings expectations, Dollar Tree slid nearly 10%, as the company says it expects its full-year earnings to come in lower, Yahoo reported.
A group of US senators, led by Elizabeth Warren (D-MA), Tina Smith (D-MN), and Richard Durbin (D-IL), all signed a letter asking Fidelity to scrap its 401(k) Bitcoin plan the company against offering the cryptocurrency following the collapse of crypto exchange FTX, Yahoo Finance reported. The Boston-based Fidelity is one of the world’s largest asset managers, as well as America’s largest provider of 401(k) savings accounts. In April, the firm started offering companies access to Bitcoin.
In the wake of the FTX collapse, crypto pioneer and Circle CEO Jeremy Allaire sent a letter to lawmakers urging them to take rapid action on regulating stablecoins, Yahoo reported. The letter was addressed to House Financial Services Chair Maxine Waters (D-CA) and ranking member Patrick McHenry (R-NC), as well as Chairman Sherrod Brown (D-OH) and ranking and Senate Banking Committee member Pat Toomey (R- PA).
“Congress should act now to pass comprehensive payment stablecoin legislation,” Allaire wrote.
Allaire is advocating for the US to impose strict US laws to prevent another FTX catastrophe, as well as to stabilize digital markets. The crypto pioneer wrote an op-ed for MarketWatch that “the consequences of inaction are severe.”
